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For the fifth consecutive session, U.S. wheat futures have seen a downward trend, marking the longest losing streak of the year. This came as the U.S. Department of Agriculture announced that the domestic winter wheat harvest was 6% complete, which is higher than the 4% predicted by analysts and the average 3% over the past five years.
In its weekly Crop Progress report, the USDA indicated that 94% of spring wheat was planted, surpassing the five-year average of 90%.
The report also revealed that 74% of spring wheat was in good or excellent condition, an increase from 64% last year at the same time. Additionally, 49% of winter wheat was in good or excellent condition, a slight increase from the previous week and a 13-point jump from the previous year.
RCM Alternatives’ Doug Bergman stated to Dow Jones that the report did not support adding a weather premium to current futures prices.
“At this point, there is no sign of a low in the market, which is typically good for corn prices in June as the weather premium is bid into the market,” Bergman commented.
Frontier Futures broker Joe Nussmeier told Bloomberg that harvest pressure is starting to impact the market. “The issue is there’s no demand for the wheat coming off the combine,” he said.
CBOT wheat (W_1:COM) for July delivery fell -2.2% to $6.58 1/4 per bushel, while July soybeans (S_1:COM) dropped -0.4% to $11.79 1/2 per bushel and July corn (C_1:COM) settled -0.3% at $4.42 per bushel.
ETFs: (NYSEARCA:WEAT), (SOYB), (CORN), (DBA), (MOO)
Additionally, falling crude oil prices are exerting pressure on CBOT grains this week, leading to continual selling of wheat, corn, and soybeans, as per AgriTel analysts.
There is a correlation between oil and grains due to the widespread use of renewable fuels such as ethanol and soybean oil in the automobile fuel supply.
Wheat prices experienced their largest monthly increase in two years in May, as the crop in Russia, the leading exporter, suffered from a drought.
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